IN RE: APPLICATION OF ZOUZAR BOUKA; VISION INDIAN OCEAN S.A.; AND VIMA REAL ESTATE S.A.R.L. FOR AN ORDER TO CONDUCT DISCOVERY FOR USE IN FOREIGN PROCEEDINGS
22 Misc. 92 (RA) (GWG)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
October 28, 2022
GABRIEL W. GORENSTEIN, United States Magistrate Judge
OPINION and ORDER
Zouzar Bouka, together with Vision Indian Ocean S.A. (“VIO“) and VIMA Real Estate S.A.R.L. (“VIMA“), have applied pursuant to
A. Facts
The applicants VIO and VIMA are two corporations operating in Madagascar, founded and chaired by applicant Bouka, a citizen of France, see Bouka Decl. ¶¶ 1-2, whom we will refer to collectively as “Bouka” or the “Applicants.” VIO is a minority shareholder of Symbion Power Mandroseza S.A.R.L. (“SPARL“), a Malagasy energy company, and Symbion Mandroseza Mauritius Limited (“SMML“), a holding company for shares in SPARL. See id. ¶¶ 3-4. Bouka is also a “gerant,” a title “akin to being a director and officer,” of SPARL. Id. ¶ 3. In this application, Bouka seeks a deposition and documents from Symbion, several subsidiaries, and its CEO, Paul Hinks. See Proposed Subpoenas; App. Mem. at 11.4
The interaction among these parties arises from the operation and eventual sale of the Mandroseza power plant in Madagascar. See Bouka Decl.; App. Mem. In 2015, Symbion, through its subsidiary SPARL, contracted with the government of Madagascar to operate the Mandroseza plant. See Hinks Decl. ¶ 5; Bouka Decl. ¶ 7. As part of Symbion‘s work on the Mandroseza plant, Symbion contracted with Bouka to act as a liaison with Madagascar officials, with Bouka receiving a $1,200,000 “success fee” once the plant became operational. Hinks Decl. ¶¶ 7-8. Symbion‘s agreement with Bouka, which Bouka refers to as a “Shareholders’ Agreement,” provided that Bouka was to receive a 5% interest in SMML. See id. ¶ 8; Bouka Decl. ¶¶ 9-10. Symbion also entered into agreements with Alpha Innovations Management, Ltd. (“Alpha“) to assist with financing the Mandroseza project. See Hinks Decl. ¶ 11.
On March 3, 2020, Bouka, purportedly acting in his capacity as a gerant of SPARL, directed an attorney to initiate a criminal complaint in Madagascar against Hinks, alleging that funds had been misappropriated from SPARL by Hinks and Symbion. See Banks Decl. ¶¶ 4-5. Because the complaint alleged corruption-related crimes, it was referred to the “Pole Anticorruption,” a division of Madagascar‘s judiciary designated to handle corruption matters. See id. ¶¶ 6-8. On June 30, 2021, a Malagasy judge issued an order finding that there was sufficient evidence to permit the criminal complaint to move forward against Hinks. See id. ¶ 13; Anti-Corruption Division Order for Partial Dismissal, annexed as Ex. 2 to Banks Decl. Hinks appealed this decision, which was affirmed by an intermediate appellate court. See Banks Decl. ¶ 15. Hinks then appealed to the Malagasy Court of Cassation, which rejected the appeal, thereby ending Hinks’ effort to obtain a dismissal of the complaint before the criminal trial begins. See Order of Court of Cassation, dated June 7, 2022, annexed as Ex. 2 to App. Supp. Ltr.; Banks Decl. ¶¶ 16-17. Malagasy criminal procedure rules permit Bouka, through SPARL, to participate in the criminal proceedings as a civil party. See Banks Decl. ¶¶ 6-7, 18. As a civil
In February 2022, it was announced that Symbion had sold its interests in the Mandroseza plant to Groupe Filatex, a Malagasy corporation. See Bouka Decl. ¶ 22; Malan Decl. ¶¶ 4-6; Press Release, dated Feb. 7, 2022, annexed as Ex. 2 to Malan Decl. Bouka asserts that this sale occurred without providing him notice or obtaining his consent, in violation of his rights as a shareholder under Malagasy corporate law. See Malan Decl. ¶¶ 8-15. As is discussed further below, Bouka has considered taking legal action in France regarding the Groupe Filatex acquisition of the Mandroseza plant.
B. The Instant Application
Bouka filed the instant application for discovery, consisting of subpoenas for documents and depositions of Hinks and the five Symbion entities, pursuant to
II. LEGAL STANDARD
“In ruling on an application made pursuant to section 1782, a district court must first consider the statutory requirements and then use its discretion in balancing a number of factors.” Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76, 80 (2d Cir. 2012). As a threshold matter, an application for discovery under section 1782 must meet the following requirements: “(1) the person from whom discovery is sought resides (or is found) in the district of the district court to which the application is made, (2) the discovery is for use in a foreign proceeding before a foreign tribunal, and (3) the application is made by a foreign or international tribunal or any interested person.” Id.; accord
Section 1782 “authorizes, but does not require, a federal district court to provide judicial assistance to foreign or international tribunals or to ‘interested person[s]’ in proceedings abroad.” Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 (2004). Once section 1782(a)‘s minimum requirements are met, “a district court is free to grant discovery in its discretion.” In re Application for an Order Permitting Metallgesellschaft AG to take Discovery, 121 F.3d 77, 78 (2d Cir. 1997) (internal citation omitted). In Intel, the Supreme Court articulated four factors that courts may consider in exercising that discretion: (1) whether “the person from whom discovery is sought is a participant in the foreign proceeding“; (2) “the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance“; (3) “whether
III. DISCUSSION
Respondents do not contest that the individuals and entities “from whom discovery is sought” reside or are found in this district. See Opp. Mem. at 11. Nor do they argue that the application has not been made by “any interested person.” See id. In any event, the Court finds that these two statutory requirements are met here. Hinks resides in New York and the Symbion Group entities have their principal place of business in New York. See App. Mem. at 13. Also, as is explained further below, Bouka, through SPARL, is the complainant and civil party in the Madagascar criminal court proceeding and a would-be plaintiff in the contemplated French action. Accordingly, respondents’ only argument that the statutory requirements of section 1782 are not met is that the requested discovery is not “for use” in the two foreign proceedings applicants identify. See Opp. Mem. at 12-17. Separately, respondents argue that the Court should exercise its discretion to deny the application even if we find that the statutory requirements are met. See id. at 17-21.
Respondents argue that the application does not satisfy the requirement that the requested discovery be “for use” in a foreign proceeding. See id. at 12-17. With regard to the Madagascar proceeding, respondents argue that “Bouka cannot use the documents he seeks . . . because (1) he cannot submit evidence in that tribunal; and (2) the complaint he filed is a sham.” Id. at 12. As to the potential French action, respondents argue that the lawsuit is not “within reasonable contemplation,” or “sufficiently determinate to be a basis for § 1782 discovery.” Id. at 15.
“By adopting the phrase ‘for use,’ Congress plainly meant to require that § 1782 applicants show that the evidence sought is ‘something that will be employed with some advantage or serve some use in the proceeding.‘” Certain Funds, Accts. &/or Inv. Vehicles v. KPMG, L.L.P., 798 F.3d 113, 120 (2d Cir. 2015) (quoting Mees v. Buiter, 793 F.3d 291, 297 (2d Cir. 2015)). “The key question, therefore, is not simply whether the information sought is relevant, but whether the [applicant] will actually be able to use the information in the proceeding.” Id. A party need not have “formal ‘party’ or ‘litigant’ status,” where it nevertheless possesses “significant procedural rights,” such as the ability to “submit . . . information in support of its allegations, and . . . seek judicial review.” Intel, 542 U.S. at 255.
We consider the ongoing Madagascar criminal proceeding and the contemplated French civil action separately.
1. Madagascar Criminal Proceeding
First, SPARL‘s role as a civil party to the criminal prosecution of Hinks satisfies the “for use” requirement of section 1782. Although courts have not considered Madagascar‘s combined civil-criminal procedures specifically, other comparable regimes have been the subject of successful section 1782 applications. For example, the Second Circuit held that an application
Respondents argue that the Madagascar criminal proceeding is a “Bouka-[c]reated [s]ham.” See Opp. Mem. at 13. Respondents offer numerous arguments as to why the proceeding is flawed on the merits. Id. at 13-14; Opp. Supp. Ltr. at 1-3. However, “[a] district court‘s focus in considering a request under § 1782 is not on the merits of the proposed claim, but on the movant‘s ‘practical ability to inject the requested information into a foreign proceeding.‘” IJK Palm LLC v. Anholt Services USA, Inc., 33 F.4th 669, 680 (2d Cir. 2022) (quoting Accent Delight, 869 F.3d at 132); accord Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d 1262, 1274 (11th Cir. 2014) (“Like the district court, we are in no position to assess the merits of [the parties’ foreign
For similar reasons, we reject the argument that it matters whether Bouka signed a document withdrawing that proceeding. See Opp. Mem. at 2, 13-14. The respondents supply no evidence that this document has any legal effect on the pendency of the Madagascar proceeding or, more to the point, that it would affect the Madagascar court‘s ability to receive evidence obtained by Bouka.6
Respondents’ only remaining argument that Bouka‘s application does not meet the “for use” requirement of section 1782 is that the proceeding does not comport with notions of due process in light of alleged corruption in Madagascar‘s judicial system. See Opp. Supp. Ltr. at 2-3. However, the decisions respondents cite in support of this argument construe this as a discretionary consideration, not part of the statutory requirements for a section 1782 application. See United States v. Sealed 1, Letter of Request for Legal Assistance from the Deputy Prosecutor Gen. of the Russian Fed‘n, 235 F.3d 1200, 1206 (9th Cir. 2000) (listing compatibility with domestic notions of propriety as a “factor[] that district courts may consider“); John Deere Ltd. v. Sperry Corp., 754 F.2d 132, 136 n.3 (3d Cir. 1985) (reviewing legislative history regarding the court‘s “discretionary power” and concluding that it “would seem to authorize
In sum, the evidence which Bouka seeks for admission by SPARL as a civil party in the Madagascar criminal trial meets the minimum requirements of section 1782.
2. French Civil Proceeding
Symbion argues that the contemplated French proceedings are “not sufficiently determinate to be a basis for § 1782 discovery.” Opp. Mem. at 15.
Section 1782 allows discovery “for use” in foreign proceedings.
While discovery is available under section 1782 for use in contemplated suits, discovery is not available for a party to seek information about whether to file suit in the first place.
Thus, “[w]here materials are sought for use in a future proceeding . . . [a]n applicant should ‘provide the legal theory supporting such a proceeding‘[;] ‘lay out either the content of his claims’ or ‘a sufficiently concrete basis for’ liability[;] and ‘provide sufficiently reliable indications of the likelihood that proceedings will be instituted within a reasonable time.‘” Ex Parte Abdalla, 2021 WL 168469, at *3 (S.D.N.Y. Jan. 19, 2021) (citing Mangouras v. Squire Patton Boggs, 980 F.3d 88, 101 (2d Cir. 2020)). In Kuwait Ports Authority, the court found that where an applicant “has retained [local] counsel, said counsel has begun preparing the necessary pleadings for the petition[,] the Application has set forth a theory [of liability,] . . . and the [applicant] has provided declarations expressing an intent to initiate the . . . proceedings, the [‘use of‘] factor is satisfied.” In re Kuwait Ports Auth., 2021 WL 5909999, at *8 (S.D.N.Y. Dec. 13, 2021). In In re Hansainvest Hanseatische Inv.-GmbH, the court identified further indicia that materials were sought for “reasonably contemplated” proceedings, “including hiring [foreign] litigation counsel, retaining experts, and sending a detailed demand letter.” 364 F. Supp. 3d 243, 249 (S.D.N.Y. 2018).
Additionally, Bouka‘s counsel sent Groupe Filatex a letter on December 10, 2021, identifying the Applicants’ interest in the Mandroseza plant and warning that any interest Groupe Filatex acquired in the plant would be subject to Applicants’ claimed interest. See Bouka Decl. ¶ 27; Letter from Juliya Arbisman, dated Dec. 10, 2021, annexed as Ex. 11 to Bouka Decl. Bouka‘s counsel also contacted Energiestro “to place them on notice of [the Applicants‘] ownership interests in” the Mandroseza plant and “express[] concern that Energiestro” had facilitated a violation of applicants’ rights. See Malan Decl. ¶ 10; Letter from Alexandre Malan, dated March 8, 2022, annexed as Ex. 4 to Malan Decl.
Here, while his retention of counsel and description of potential claims suggest Bouka‘s action is “reasonably contemplated,” we are concerned by his statement that he “need[s] additional information about the purported sale so that [he] can authorize [counsel] to proceed with the lawsuit.” Bouka Decl. ¶ 26. An intent by an applicant to file a lawsuit “once it obtain[s] additional information,” however, is not necessarily fatal to a section 1782 application. See In re Hornbeam Corp., 722 F. App‘x 7, 9 (2d Cir. 2018) (“concrete basis” was provided for §1782 application where applicant had previously brought related actions and “intended to initiate further litigation once it obtained additional information“). Case law sheds light on the
While it is a close question, Bouka‘s situation is more analogous to that in Team Co. Unlike in Pilatus Bank, Bouka has identified the particular claims that he intends to allege, and states that he is seeking more information “to frame his French pleadings” and provide evidence in that case. App Reply. at 9. Unlike in Lucille Holdings, Bouka has laid out a jurisdictional basis for his claims, and has identified the tribunal in which he intends to assert them. See Malan Decl. ¶¶ 14-19. As in Team Co., Bouka seeks specific information to support his existing claims—here, the structure of the sale—rather than general grounds for suit. See Bouka Decl. ¶ 26. As such, Sargeant‘s concern that the application merely seeks fodder for a hypothetical suit is not implicated.
Because Bouka has retained local counsel, laid out a basis for liability, and identified the factual basis of his claims, we find that the French Proceedings are “reasonably contemplated,” and thus the requested discovery would be “for use” in a foreign proceeding.
B. Discretion
In determining whether we should exercise our discretion to grant a section 1782 application, we look to the Intel factors: (1) whether “the person from whom discovery is sought is a participant in the foreign proceeding“; (2) “the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance“; (3) “whether the § 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States“; and (4) whether the request is “unduly intrusive or burdensome.” Intel, 542 U.S. at 264-65. We consider each factor below with respect to the two proceedings.
a. Participation in the Foreign Proceedings
The first Intel factor asks whether “the person from whom discovery is sought is a participant in the foreign proceeding” because “the need for § 1782(a) aid generally is not as apparent as it ordinarily is when evidence is sought from a nonparticipant in the matter arising abroad.” Intel, 542 U.S. at 264. “A foreign tribunal has jurisdiction over those appearing before it, and can itself order them to produce evidence.” Id. Accordingly, “when the real party from whom documents are sought . . . is involved in foreign proceedings, the first Intel factor counsels against granting a Section 1782 petition.” Kiobel, 895 F.3d at 245 (citing Schmitz v. Bernstein Liebhard & Lifshitz, LLP., 376 F.3d 79, 85 (2d Cir. 2004)); accord In re Godfrey, 526 F. Supp. 2d 417, 419 (S.D.N.Y. 2007) (characterizing the first Intel factor as “[w]hether the documents or testimony sought are within the foreign tribunal‘s jurisdictional reach, and thus accessible absent § 1782 aid“); In re Microsoft Corp., 428 F. Supp. 2d 188, 194 (S.D.N.Y. 2006) (while the entities from which documents were sought were not participants in the proceeding, the documents were within the tribunal‘s “reach” and thus were already “available“).
As respondents highlight, Hinks, the CEO of Symbion, is the defendant and thus a participant in the Madagascar criminal proceeding. See Opp. Mem. at 18; Hinks Decl. ¶ 1, 29. Symbion and its subsidiaries, which are the targets of the subpoenas, are not named as defendants in that matter, however, see App. Mem. at 8, and so this fact does not counsel against granting the application as to those entities.
The first Intel factor also calls on us to assess the ability of those jurisdictions to obtain the requested discovery. See In re Microsoft, 428 F. Supp. 2d at 193-94 (inquiring into whether the requested documents were “within the [foreign tribunal‘s] reach“); In re Servicio Pan Americano de Proteccion
In light of the apparent limitations in obtaining additional discovery in the Madagascar criminal prosecution, the first factor weighs in favor of granting the application.
b. The Nature of the Foreign Proceedings
The second Intel factor calls for an assessment of “the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance.” Intel, 542 U.S. at 264. “[A]bsent authoritative proof that a foreign tribunal would reject the evidence obtained with the aid of section 1782, . . . a district court should not refrain from granting the assistance afforded under the Act based simply on allegations to that effect.” In re Metallgesellschaft, 121 F.3d at 80 (punctuation omitted); accord Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1100 (2d Cir. 1995) (“[A] district court‘s inquiry into the discoverability of requested materials should consider only authoritative proof that a foreign tribunal would reject evidence obtained with the
We also consider the character of the foreign proceeding and whether it is “unfair or incompatible with domestic notions of propriety.” Sealed 1, 235 F.3d at 1206. Respondents’ opposition to the application alleges that the Madagascar prosecution is a “sham” and that Bouka is using the Madagascar criminal action “to improve his leverage in unrelated civil proceedings,” apparently referring to the arbitration between Bouka and Symbion. Opp. Mem. at 18-19. Respondents also argue that Bouka withdrew or otherwise lacked authority to initiate the criminal action. Id. at 13-14, 19.
With regard to respondents’ arguments regarding alleged corruption in Madagascar‘s judiciary, see Opp. Supp. Ltr. at 2-3; Opp. Aug. 31 Ltr. at 1, respondents suggest that “Bouka bears the burden to demonstrate that Hinks will be guaranteed a fair trial that meets minimum due process standards,” id. at 2. Respondents provide no support for the proposition that this is a requirement of a section 1782 application; nor is the Court aware of any such authority. Respondents argue that the United States Department of State has opined on the susceptibility of Malagasy courts to outside influences. See id. at 2. Respondents highlight that one publication assessed Madagascar with a bottom tier “Rule-of-law score.” See id. (citing Yanbai Andrea Wang, Exporting American Discovery, 87 U. Chi. L. Rev. 2089, 2164 (2020)). However, section 1782 applications have been granted for use in proceedings taking place in other jurisdictions that appear in that same tier. See, e.g., In re Tiberius Grp. AG, 2020 WL 1140784, at *9 (S.D.N.Y. Mar. 6, 2020) (Nigeria); Servicio Pan Americano, 354 F. Supp. 2d at 275 (Venezuela). Ultimately, while respondents’ arguments regarding potential corruption in Madagascar‘s courts gives the Court some pause, there is no particular evidence regarding corruption in this case and thus we do not find that these assertions justify denying the application. See Republic of Ecuador, 2011 WL 736868, at *9 (acknowledging that there “may be some reason to question the legitimacy of the foreign proceedings, based on numerous
Hinks also argues that granting the application would undermine his Fifth Amendment rights. See Opp. Supp. Ltr. at 3. But section 1782 expressly provides that “[a] person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.” See In re Gorsoan Ltd., 2020 WL 6891520, at *5 (S.D.N.Y. Nov. 23, 2020) (permitting section 1782 deponent to invoke Fifth Amendment privilege). If there is a basis to assert privilege, that claim may be made in response to specific questions at a deposition.
Finally, respondents contend that Bouka hopes to use this discovery in litigation other than the Malagasy case. See Opp. Mem. at 18-19; Opp. Supp. Ltr. at 4. But this would not provide a reason to deny relief. See In re Al-Attabi, 2022 WL 229784, at *9 (S.D.N.Y. Jan. 26, 2022) (“[P]rovided the statutory and discretionary criteria are satisfied, . . . a Section 1782 application should not be denied merely because the discovery material may have potential other uses by the petitioner.“); Ahmad Hamad Algosaibi & Bros. Co. v. Standard Chartered Int‘l (USA) Ltd., 785 F. Supp. 2d 434, 439 (S.D.N.Y. 2011) (finding that “the fact that [the applicant] may also be able to use the discovery in future litigation against the respondents is immaterial” to decision to grant application); cf. In re YS GM Marfin II LLC, 2022 WL 624291, at *10 (S.D.N.Y. Mar. 2, 2022) (third Intel factor favored applicants notwithstanding applicants’ refusal to limit the use of the requested discovery).
In the absence of evidence to the contrary, we assume that the Madagascar court will be receptive to the evidence sought. At the same time, we have some concerns regarding the
c. Whether the Application is an Attempt at Circumvention
This factor looks to “whether the § 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States.” Intel, 542 U.S. at 265; accord Kiobel, 895 F.3d at 245 (where a section 1782 application was filed in an apparent attempt “to circumvent the Netherlands’ more restrictive discovery practices,” the third Intel factor weighed against granting the application); In re Escallon, 323 F. Supp. 3d 552, 560 (S.D.N.Y. 2018) (third factor counseled against granting application that was an “apparent attempt” to depose a witness who had already testified, in circumvention of Colombian law preventing second examinations). “[T]o demonstrate circumvention, Respondents must illustrate not merely that the requested documents are not obtainable through [foreign] procedures, but that Applicants are engaged in a bad faith endeavor to misuse Section 1782.” Hansainvest Hanseatische, 364 F. Supp. 3d at 251. In In re Harbour Victoria, the court exercised its discretion to deny a section 1782 application, in part “[b]ecause it appears that Petitioner is seeking to evade an adverse discovery ruling in its ongoing U.S. proceeding.” 2015 WL 4040420, at *9. After a judge in a separate case identified “serious legal issues” with a discovery motion filed by the applicant, the applicant filed a section 1782 application “seeking effectively the same discovery that was just denied.” Id. at *7. The court opined that granting the 1782 application would encourage circumvention of a court‘s discovery rulings, noting that “[i]f the judge overseeing [a] U.S. proceeding denies a given discovery request, the losing party could simply turn around and file a § 1782 petition for the same information, but repackaged as aiding the foreign proceeding.” Id.
d. Undue Burden
The fourth factor asks whether the section 1782 request is “unduly intrusive or burdensome.” Intel, 542 U.S. at 265. The Second Circuit has held that “a district court evaluating a § 1782 discovery request should assess whether the discovery sought is overbroad or unduly burdensome by applying the familiar standards of
Respondents argue that the requested discovery is unduly burdensome because Symbion has already provided Bouka with discovery as part of the ICDR arbitration. See Opp. Mem. at 19-21. Bouka responds that this should lessen the burden of discovery, as the documents have already been gathered and produced. See App. Reply at 12. Bouka concedes that “[r]espondents need only write a letter deeming the documents reproduced in this proceeding.” Id. Thus,
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On balance, we find that the Intel factors favor granting the application with the above limitations on the scope of the discovery.
2. The Contemplated French Proceedings
a. Participation in the Foreign Proceedings
i. Symbion
At one point in his opening brief, Bouka asserts that “none of [the respondents] are participants in the contemplated proceeding against Groupe Filatex,” see App. Mem. at 4, but later in the same brief states that he contemplates “bringing civil proceedings in France against Symbion, Groupe Filatex, Energiestro, and Okan Partners for the wrongful acquisition of an interest in the Plant . . .,” id. at 17 (emphasis added). Bouka‘s French attorney also repeatedly refers to a contemplated suit against Symbion or its affiliates along with Groupe Filatex and the other entities. See Malan Decl. ¶¶ 14, 18. In the same vein, the respondents’ opposition brief noted that that Symbion would be a party to the French proceeding if Bouka were to initiate the suit contemplated by his submissions and that he had not explained why discovery would not be available in the French proceeding itself. See Opp. Mem. at 21. But Bouka‘s reply brief simply does not address this point, instead suggesting that the respondents have the burden to prove what discovery is available in France and arguing a court should minimize “inquiry into foreign procedure.” App. Reply at 11 (quoting Mees, 793 F.3d at 304).7
Case law holds that a section 1782 applicant should not be permitted to call upon the resources of the United States courts to obtain discovery for a proceeding where that very discovery is available in the foreign court. See Intel, 542 U.S. at 264 (“A foreign tribunal has jurisdiction over those appearing before it, and can itself order them to produce the evidence.“). As one case put it, where “evidence is available to the foreign tribunal,” the authorization of discovery via section 1782 “is both unnecessary and improper.” In re Microsoft, 428 F. Supp. 2d at 194. Here, there is sufficient likelihood that Bouka will sue Symbion as part of the contemplated French proceedings to counsel against ordering discovery here. And while “[p]arent companies who are ‘participants’ to foreign proceedings are considered separate legal entities from their subsidiaries and affiliates for the purpose of Section 1782 motions,” In re Top Matrix Holdings Ltd., 2020 WL 248716, at *5 (S.D.N.Y. Jan. 16, 2020), Bouka has not articulated any basis from which this Court could conclude that Symbion‘s subsidiaries possessed documents or information regarding the Groupe Filatex transaction that Symbion itself did not possess or would not have access to.
ii. Hinks
Bouka also seeks discovery from Hinks, Symbion‘s CEO. While Symbion is likely to be sued as part of the French proceeding because it was a party to the Groupe Filatex transaction, nothing in Bouka‘s filings suggests that Hinks himself would be a party. However, neither does anything in Bouka‘s filings suggest that Hinks will be able to provide information that would not be available from Symbion itself. With regard to the French proceeding, Bouka asserts a need for information regarding “agreements with Alpha and Groupe Filatex . . . and related documents and communications.” App. Mem. at 11. Bouka makes no suggestion that Hinks would have access to documents or information regarding these agreements not known to Symbion, a party to the agreements. Notably, the proposed document subpoenas for Hinks and Symbion are identical. See Proposed Hinks Subpoena, Annexed as Exhibit 7 to App.; Proposed Symbion US Subpoena, Annexed as Exhibit 8 to App. We thus conclude that the discovery sought from Hinks is likely to be available from Symbion itself. Therefore, the first Intel factor weighs against granting the application as it relates to Hinks for use in the French proceeding. See Kiobel, 895 F.3d at 245 (“[W]hen the real party from whom documents are sought . . . is involved in foreign proceedings, the first Intel factor counsels against granting a 1782 petition . . . .“) (citing Schmitz, 376 F.3d at 85).
There is no indication that French courts would be averse to using discovery obtained through this Court‘s procedures, and so this factor weighs in favor of granting the application. See In re Application of Gorsoan Ltd., 2014 WL 7232262, at *7.
c. Whether the Application is an Attempt at Circumvention
Respondents argue that Bouka has contrived the French action for the purpose of circumventing an arbitrator‘s ruling denying discovery of the agreements and depositions sought by this application. See Opp. Mem. at 20; see also ICDR Procedural Order No. 8, dated Nov. 23, 2021, annexed as Ex. B to Hinks Decl. (“ICDR Order“). We accept that the ICDR arbitrator denied Bouka‘s request for discovery of parts of the settlement agreement between Symbion and Alpha. See ICDR Order. However, the only discovery respondents have shown Bouka was denied in the ICDR arbitration was for “information about the planned [corporate] structure after the intended implementation of the deal at the end of November,” not the settlement agreement as a whole. See ICDR Order ¶ 50. And as Bouka points out, he could not have been denied discovery of documents relating to the Groupe Filatex acquisition of the Mandroseza plant, as the arbitrator‘s denial was dated November 23, 2021, see id., and the Groupe Filatex acquisition was first disclosed in February 2022, see Bouka Decl. ¶ 22. Moreover, the arbitrator‘s denial of discovery of certain material from the Symbion-Alpha settlement agreement was “without prejudice to [Bouka‘s] ability to apply for further information regarding the settlement agreement once it has been finalized and appropriate circumstances exist.” ICDR Order ¶ 66. The arbitrator‘s decision thus did not definitively deny discovery of the settlement agreement and did not extend to the other documents or depositions sought by the instant application. See In re Pidwell, 2022 WL 192987, at *6 (S.D.N.Y. Jan. 21, 2022) (finding that section 1782 application
d. Whether the Request is Unduly Intrusive or Burdensome
While we find that the request may be intrusive as to certain subsidiaries, we do not address this factor further as the other factors counsel against exercising our discretion to allow discovery in relation to the French proceeding.
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Having considered all the Intel factors and related considerations, we find that they weigh against granting the application for discovery from Symbion and Hinks as applies to the contemplated French action, in light of the fact that Bouka will likely name Symbion as a defendant in any French proceeding. We therefore exercise our discretion to relegate Bouka to the French courts for purposes of obtaining any needed information from Symbion.
With respect to the contemplated French proceedings, Bouka seeks discovery of agreements between Symbion, Groupe Filatex, and Alpha regarding the sale of the Mandroseza plant to Groupe Filatex. See App. Mem. at 3. Because we do not grant Bouka‘s application as relates to the French proceeding, any discovery from Symbion that relates exclusively to these agreements, or other evidence sought exclusively for the planned French action, should not appear in the revised document subpoenas that applicants have been directed to submit. There should be no questioning at deposition on these agreements or on matters relating exclusively to the planned French action.
The application to take discovery (Docket # 1) is granted in part and denied in part. The Applicants may submit proposed revised subpoenas (disclosing the respondents’ views on the proposed wording) within 21 days of the date of this decision.
SO ORDERED.
Dated: October 28, 2022
New York, New York
GABRIEL W. GORENSTEIN
United States Magistrate Judge